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How to Profit from the Coming Real Estate BustBy John Rubino
If you’re interested in learning about the coming financial crisis from a real estate perspective, How to Profit from the Coming Real Estate Bust is an interesting read. This book is written by John Rubino, a Wall Street financial analyst and a regular contributor to TheStreet.com and other well known financial publications. According to John Rubino, the housing market is in a bubble that has resulted from extraordinary low interest rates and home buyers taking on overly aggressive and highly leveraged mortgages. To top it off, rampant use of home equity credit lines has reduced the nations’ home equity while driving consumers deeply into debt. Consumers are not the only ones in trouble, says Rubino. He points out the poor position that state and local government finances are in. Additionally, he argues that excessive derivative use by banks has caused a huge and increasingly complex web of financial instruments. According to his statistics, $55 trillion worth of derivatives are in existence in the U.S. alone. In his view, these derivatives have the power to potentially collapse our financial system if something goes even remotely wrong. John Rubino is not alone as he shares this same view as Warren Buffett. Buffett equates complex derivatives to “financial weapons of mass destruction”. The second part of this book explains how to invest for the coming bear market that will result when housing crashes, leading the rest of the economy down with it. Rubino recommends investing in foreign currencies, cash rich companies and companies with pricing power. This book shares many similarities with Robert Prechter’s, Conquer the Crash. Both books are broken into two parts, the first being evidence for the coming crash, and the last being how to invest for the crash. While John Rubino’s viewpoint stems from his observations of the real estate market, and Prechter’s evidence is from Elliott Wave analysis, both come to the same gloomy conclusion. But, according to them, you can profit from a financial disaster. I recommend How to Profit from the Coming Real Estate Bust to anyone, because virtually everyone will be affected when the housing market falls. It is better to be prepared for the worst than to be in denial of the truth. Ignorance is not bliss, it is suicide!
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